The SAFETY Act: Obama Cyber Plans and the Private Sector

On May 29, the Obama Administration released the results of its
60-day cyber review. The review correctly emphasized the vital role
of the private sector in any future national cybersecurity
strategy. Involving the private sector effectively, however, will
require a liability protection regime--one that encourages industry
to invest in cybertechnologies that protect against acts of
cyberterrorism.

This can best be accomplished by the Support Anti-Terrorism by
Fostering Effective Technologies (SAFETY) Act, which provides
liability protection for manufacturers whose products and services
are used in combating terrorism. Congress should support the
continuance and expansion of the SAFETY Act, and the Administration
should ensure that the act's protections are used effectively in
the cyber realm.

The Cybersecurity Review

President Obama ordered a 60-day review of the nation's
cybersecurity efforts in February. Major cyberattacks, including
one on the nation of Georgia, and a constant barrage of hackings on
major financial institutions and retailers like T. J. Maxx and
Marshalls (a hacker stole $45.7 million in credit and debit cards
in 2007) have led the drive for a comprehensive assessment of cyber
capabilities, challenges, and recommendations going forward.

The review highlights several major aspects of the national
cyber realm, including the role of the federal government, a
description of the nation's cyber problem, and recommendations for
the future. The role of the private sector in helping to tackle the
problem was also well documented in the review, including the need
for more federal government-private sector partnerships.

The review further noted the need to continually invest and
research new technologies to stop cyberattacks. Specifically, it
called for the federal government to "harness the full benefits of
technology> to address national economic needs and national security
requirements." But the review emphasized the private sector's role
in meeting this goal.

The Importance of the Private Sector
in Cyber Protection

The private sector remains a pivotal partner in ensuring the
safety of cyber infrastructure for the following reasons:

Almost all cyber infrastructure is owned and maintained by the
private sector;

Cybertechnologies are used in almost every element of human
life--from ATMs to medical technologies; and

The private sector can research and develop new technologies at
a faster rate than the federal government.

Even with the financial benefits of developing new
cybertechnologies, the private sector will not invest in these new
technologies if the benefits of doing so are outweighed by the
risks. For example, companies are less likely to create and market
a new product if a lawsuit stemming from it could destroy their
entire business.

After the 1993 World Trade Center bombing, the New York Supreme
Court upheld a decision that found the Port Authority of New York
and New Jersey liable for the bombing. The court's reasoning: The
Port Authority was aware of the threat and did not take reasonable
steps to mitigate it. After 9/11, insurance premiums for
terrorism-related risks skyrocketed, and a number of firms stopped
offering terrorism insurance. This kind of liability and
potentially devastating jury verdicts have made many companies
hesitant to research, develop, and market anti-terrorism
technologies.

But America simply cannot afford to let the private sector stop
innovating. Recognizing this problem, Congress enacted the SAFETY
Act, which lowered the liability risks of manufacturers that
provide products and services used in combating terrorism by giving
government-certified technologies protection from suit if the
technology> failed or was involved in an act of terrorism. The
SAFETY Act applies to a multitude of anti-terrorism technologies
and includes those used to ward off cyberattacks.

How to Involve the Private Sector

The SAFETY Act continues to play an important role in ensuring
that the U.S. does not lose its footing in the cyber domain.
America needs companies to continue to develop technologies that
keep the U.S. safer, both physically and virtually. As part of a
future cyberstrategy, the Obama Administration should:

Support the SAFETY Act. Over 200 companies have
obtained SAFETY Act certification. The Department of Homeland
Security (DHS) must continue to encourage new applicants for SAFETY
Act certification. This approach needs to include aggressive
marketing, especially to small businesses and specifically to cyber
businesses. Neither DHS nor the private sector can assume that
Congress will allow the SAFETY Act to stand over time, and it must
be continually maintained.

Go international. One area that is ripe for enhanced
international cooperation is third-party liability for terrorist
attacks. The SAFETY Act provides protections for "sellers"
(manufacturers, distributors, and providers) for cases under the
jurisdiction of U.S. courts. Terrorism, however, is a global
threat, and homeland security is a global mission. From securing
the border to protecting global supply chains, virtually every
aspect of preventing terrorist attacks has an international
dimension that requires the U.S. to work effectively with its
friends and allies. Other countries should consider similar
liability protection regimes to provide the industrial base around
the world with incentives to develop and adopt the best tools to
fight terrorism no matter where they are manufactured or employed.
The U.S. should support these kinds of partnerships on a bilateral
basis.

Streamline the assessment process. DHS has gone to
great lengths to make sure that the SAFETY Act process continues to
be company-friendly. But the departments needs to ensure that the
auditing program is not too burdensome and that it is reflective of
business needs while verifying that only quality products obtain
certification.

Support the Private Sector

The Obama Administration is right to place attention on
America's cyber challenges. But it is vital to recognize the
principal position of the private sector in ensuring cybersecurity.
The Administration should be careful not to view the private sector
as simply another partnership: It is a major player in the cyber
domain whose efforts must be supported.

Jena Baker
McNeill is Policy Analyst for Homeland Security in the Douglas
and Sarah Allison Center for Foreign Policy Studies, a division of
the Kathryn and Shelby Cullom Davis Institute for International
Studies, at The Heritage Foundation.

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